Global Patient Registry Software Market is expected to witness market growth at a rate of 11.12% in the forecast period of 2022 to 2029. Data Bridge Market Research report on patient registry software market provides analysis and insights regarding the various factors expected to be prevalent throughout the forecast.
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On March 19, in a matter of first impression, the Third Circuit Court of Appeals (Court) held that triangular setoff is not permissible in bankruptcy due to Bankruptcy Code Section 553(a) s mutuality requirement, and that parties cannot evade that requirement by contracting around it.
See In re Orexigen Therapeutics, Inc., 990 F.3d 748 (3d Cir. 2021).
McKesson Corporation, Inc. (McKesson) and Orexigen Therapeutics, Inc. (Orexigen) were parties to a distribution agreement, where Orexigen would sell McKesson the drug Contrave, and McKesson would, in turn, sell the drug to pharmacies. The distribution agreement also had a provision (Setoff Provision) that stated McKesson could reduce any amounts it owed to Orexigen by any amount that Orexigen owed to McKesson or any of its subsidiaries. Separately, Orexigen and McKesson Patient Relationship Solutions (MPRS), a McKesson subsidiary, entered into a services agreement whereby
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In its recent opinion arising out of the Orexigen
Therapeutics Inc. bankruptcy case, the US Court of Appeals for the
Third Circuit affirmed that while a creditor retains its direct
setoff rights against a debtor under Section 553 of the Bankruptcy
Code when both it and the debtor owe debts to one another, so
called triangular setoffs - setoffs relating to
affiliated third party debts - are not similarly protected, even if
provided for contractually.
1 In so holding, the Third Circuit
became the first US circuit court of appeals to reach the issue and
In a March 19, 2021, decision in
., the Third Circuit joined the Second, Fifth and Seventh Circuits, prohibiting triangular setoff in a bankruptcy proceeding. A triangular setoff occurs when Party A attempts to set off a debt owed by it to Party B against a debt owed by Party B to Party C. This raises practical concerns for parties that have multiple contracts with a third party, particularly if affiliates or subsidiaries are parties to some of those contracts.
Background
In July 2016, Orexigen entered into a “Services Agreement” with McKesson Patient Relationship Solutions (MPRS), a wholly owned subsidiary of McKesson Corporation, Inc. The agreement concerned a loyalty rebate program, under which MPRS advanced funds to pharmacies to finance discounts and then billed Orexigen for reimbursement, creating an account payable by Orexigen to MPRS. Separately, Orexigen and McKesson were parties to a “Distribution Agreement,” under which, McKesson purchased drugs manufactured by
Introduction
In a recent decision,
In re Orexigen Therapeutics, Inc., No. 20-1136, 2021 U.S. App. LEXIS 8075 (3d Cir. Mar. 19, 2021), the Third Circuit held that triangular setoff arrangements are unenforceable under section 553 of the Bankruptcy Code. A triangular setoff arrangement arises when one party to a contract attempts to not only set off debts owed to another (debtor), but also debts owed by nonparty affiliates of such counterparty. For instance, if A and B are parties to a contract, under a triangular setoff arrangement A may be able to reduce its outstanding liabilities owed to B by setting off–or canceling–amounts owed to A by C, who is an affiliate of B but not a party to the contract between A and B. Once a party to a contract files for bankruptcy protection, section 553 of the Bankruptcy Code governs and places, among others, a “mutuality” requirement on the parties to a contract, which in turn limits nonbankruptcy setoff rights, even in instances where p